There have recently been a number of positive developments in the challenge to the current standard, universal requirement that all clubs return a minimum of 37.12% to authorised purposes.

Clubs New Zealand supported the Te Aroha Club in its Gambling Commission appeal which challenged the standard licence condition. The Te Aroha Club lodged an appeal with the Gambling Commission in December 2009. Following the lodging of the appeal the Department of Internal Affairs requested some time to consider their policy of requiring all clubs to return 37.12%. The appeal was adjourned for several months to enable this review to take place.

On 1 September 2010 the Department issued new guidelines for clubs. The guidelines provided that:

• Those clubs that return between 30% and 37.12% should have their licence renewed, but encouraged to return at least 37.12%;
• Those clubs returning between 25% and 30% should be considered marginal operations; and
• Those clubs returning less than 25% would be considered poor operations.

By letter dated 7 December 2010 the Department withdrew its previous decision to refuse to renew the Te Aroha Club's licence. This had the effect of bringing the appeal process to an end. The Department subsequently advised that it proposed to refuse to renew the Te Aroha Club's 2010 licence renewal. By letter dated 1 February 2011 the Te Aroha Club made comprehensive submissions disputing that the club was not financially viable and challenged the validity of the 37.12% licence condition. No reply to date has been received from the Department.

In the meantime an appeal lodged by the Brunner Rugby League Club has been determined by the Gambling Commission. Similar arguments as those made in the Te Aroha Club case were made. The appeal was successful. However, the Commission found that the Brunner Rugby League Club was able to meet the 37.12% licence condition and therefore did not need to consider whether the condition was reasonable.

The Commission did however note that in future cases it will be appropriate to consider the reasonableness of a 37.12% licence condition but stated that it expected clubs who wished to challenge such a condition, to do so as an appeal against the licence condition once it is imposed, not as an appeal against any subsequent cancellation action for failing to meet the licence condition. The clear message from the Commission was that clubs must immediately appeal any 37.12% licence condition when they receive their renewed licence each year, if they believe that a lesser percentage or no percentage at all should be applied. An appeal must be received by the Gambling Commission within 15 working days of the date of the Department's letter enclosing the renewed licence.

If the Department continues with its proposal to refuse to renew the Te Aroha Club's operator's licence the club will lodge a fresh appeal and proceed with the 37.12% challenge. In the meantime, any other club which has recently had their licence renewed and is concerned with their ability to meet a 37.12% licence condition should immediately appeal the existence of the licence condition and seek to have the licence condition removed or the percentage reduced.

A number of clubs who historically had returns of around 30% are now looking to restore their gaming operation in light of the new policy. The major difficulty many clubs are facing is the requirement to obtain territorial authority consent to re-establish the gaming operation when the local gambling venue policy prevents any new gambling venue being established. A major positive development in this area is however imminent.

Clubs New Zealand have recently had the opportunity to review a new publication on class 4 gambling, the New Zealand Gambling Law Guide. The Guide is available in traditional book format and also available online. The hard copy is updated every six months, and the online version updated weekly. The Guide includes chapters on:

• What is included as an authorised purpose;
• Calculating depreciation;
• Club mergers – 30 machines;
• Club expansion – 9 machines to 18;
• Financial viability, the test for clubs; and
• Harm minimisation, exclusion orders, signage, advertising etc.

The Guide is written for gaming society field staff and club managers and is certainly a valuable tool. The cost of the guide for individual clubs is $490.00 plus GST per year. A trial subscription can be obtained by applying online at www.gamblinglaw.co.nz

(SOURCE: Jarrod True, Harkness Henry, Lawyers)